One important step you must do before closing on your new home is to have a title search done. This is a requirement in order to get a mortgage, and it also protects your financial investment in your home. Here are some things you'll learn about the home you intend to buy when a title search is done, plus some of the services a title search company provides.
Information Learned Through A Title Search
One of the most important things a title search reveals is the true owner of a property. This can be found out by searching property records to obtain a history of ownership throughout the property's life. The title search company will also look for potential missing heirs who may rightfully own the house and not know it. This ensures that the seller has the legal right to sell you the house and that you'll be in the clear when you buy it.
Another important thing you'll want to know about the house is if it is free of financial obligations such as liens or unpaid taxes. This is important to know because if back taxes are owed on the property, the city could force the sale of it after you buy the house. If there are liens, judgments, or other debts that keep the sale of the house from going through, a title search identifies the problems so the seller can pay them off before you buy the house. This keeps debts from becoming your responsibility once you're the new owner of the home.
A title search also involves a survey of the property or an assessment of a recent survey that shows areas where land ownership may be in question. If a neighbor has a fence on your side of the property line or if the property you want to buy has a shed built in an easement, that could cause you problems later. Issues like this need to be worked out before you buy the property to spare you from neighbors' lawsuits and other frustrations.
Services Provided By A Title Search Company
Title search services include providing you with a report that identifies potential problems with the property and issuing title insurance. Your mortgage lender will want title insurance to cover their losses, in case it is found later that you bought the home from someone who didn't have the right to sell it to you. You'll also want your own title insurance to protect you against loss in case a problem with ownership of the land, or a part of it, ever arises. A title search company does a complete investigation of the property so you have peace of mind when you buy the house. However, it's always possible a title could have a hidden problem, and in that case, you'll want to have insurance to protect you.
